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Tourism and hospitality value chain is essential to economic diversification 13 Dec 2017

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I read with keen interest the interview of Valentine Ozigbo, CEO of Transcorp Hotels Plc, published in the June 2017 edition of Financial Nigeria, with the title “Nigeria remains a strong pipeline nation for hospitality.” As a subscriber to the magazine and a professional in the tourism and hospitality industry, I couldn’t help but put pen to paper to contribute my own views on the bountiful opportunities in the industry.

Hospitality, simply defined, is the provision of food, drink, accommodation, entertainment, leisure, etc, to people away from home. While it is a broad industry, it is underpinned by two major operations, which are food and beverage services and lodging or accommodation services. I consider tourism as the ‘flesh’ on the hospitality ‘bone’. The tourism sector reinforces hospitality and vice versa.

Nigeria has all the potential to become one of the top 20 tourism destinations in Africa. The country already has one of the leading hospitality sectors on the continent. Nigeria maintained its number one position on the top-10 list for hotel deals signed – with 61 hotels and over 10,000 rooms planned – according to the Hotel Chain Development Pipeline in Africa 2016 report, published by W Hospitality in May last year. Indeed, the dynamism of the tourism and hospitality sector can help achieve the country's desired economic diversification.

The two major operations in the industry can catalyse growth in other sectors such as food production, entertainment, arts, transportation, and financial services. This is not to mention technological innovations that would support the delivery of tourism and hospitality services. In other words, developing the value chain potential of the tourism and hospitality industry would bring about substantial opportunities for employment, improvement in living standards and revenue generation for the government.   

To elaborate, let’s consider the setting up of a boutique hotel, that is, a small hotel with between 10 and 100 rooms in a unique setting, with upscale accommodation. Apart from the investors, there would be a team of developers, architects, civil and electrical engineers, as well as artisans. Others would be equipment and building material suppliers, furniture producers and/or retailers, interior decorators, among many others.

Before the hotel begins to operate, three major operations/departments would need to be set up. These are front office/room division, housekeeping, and food and beverage services. For these operations to take off, the owners would need office equipment, software, uniforms, stationaries, merchandising equipment, service staff, etc.

To further expand on this, the food and beverage services, for instance, would require cooking wares, refrigerators, farm produce – in amazingly huge quantities for menus and special functions such as parties, conventions, business meetings, conferences, seminars, summits, forums, VIP cocktail functions, etc. The food production department alone can boost growth in the agriculture sector, creating jobs and increasing incomes for the youths and smallholder farmers, especially women.

Consider for a moment, the hospitality industry in Ikeja, Lagos. There are more than 2000 hotels of various categories in the state capital. Let’s say all these hotels, with an average of 10 rooms each, serve a complimentary breakfast with a 2-egg omelette. If each room has a maximum sleeper occupancy capacity of two guests per room – where the rooms are double-bedded – the hotels would be providing omelettes for 40,000 guests. If a minimum of two eggs is used for each omelette, this translates to 80,000 eggs per day and more than half a million eggs per week used in the 2000 hotels in Ikeja. This is assuming all the guests stayed for a week and ate this breakfast menu.

By implication, poultry farmers would need to supply over 29 million eggs to hotels in Ikeja every year. If we also consider there are other standard hotels in other areas in Lagos, not to mention the big international brands in the metropolis, we will certainly not be talking about 29 million-plus eggs in a year. This is apart from the other farm produce used in food production that I didn’t mention. That, and more, shows the phenomenal impact the food production department of hotels can have on the economy.

But the question to ask is: how many poultry smallholder farmers in Lagos are millionaires? My guess is they are few. This means there is still a lot to be done in the agriculture sector as part of diversification agenda of the government to generate income for smallholders and rural labourers unable to escape poverty. This is a major objective of the Malabo Declaration that policymakers like to talk about. It calls for the elimination of hunger and malnutrition, the reduction of import dependence and the establishment of a strong regional market for agro-food products based on agro-commercialisation. It places emphasis on building opportunities for value addition.

Obviously, the effective delivery of exceptional, seamless and excellent services in the tourism and hospitality industry is dependent on other sectors as earlier mentioned. But when hospitality is discussed, the robust opportunities in these other sectors are muted.

As a key industry in the services sector, which accounts for more than 50% of Nigeria’s GDP, there is a need for policymakers and industry professionals to highlight the role of tourism and hospitality in propelling development in the country. Despite being in a recession, the services sector contributed 43.6% to GDP in 2016, while agriculture accounted for 24.4% and industry 22%. A viable tourism and hospitality industry will benefit the entertainment industry, increase domestic and international travel, among other positive impacts.

Important research on the industry conducted by experts needs to also focus on the labour supply. The sector requires a trained labour force, capacity building, regulation, among others.

Lauretta Togonu-Bickersteth, FIH, UK, is a Lecturer and Hospitality Consultant at Wavecrest College of Hospitality, Lagos. Email: lauriewave333@gmail.com.